You are here

One Simple Inventory Organization Hack to Save You Time and Money

Even the most disorganized among us follow some basic organizational principles in our homes: we group all the pants together in our closet and socks go in the sock drawer. In the kitchen, pots and pans live in the same cabinet, and all the knives are stored together. It makes sense: “kind” goes with “kind”.

Most eCommerce startups use the sample principles when they create their first inventory system. They group related products together on the same shelf.

But packing eCommerce orders is not like picking which pair of pants to wear in the morning.

For a simple (and counterintuitive) hack that will save you time and avoid shipping errors, all you need to do is emulate the fulfillment professionals.

Inventory Organization, Warehouse Style

To explain this inventory organization hack, let’s start by imagining that you are an eCommerce entrepreneur selling iPhone accessories. You have shelves in your garage with neatly labelled boxes of inventory lined up on them. All the Hello Kitty iPhone cases are together on one shelf. The Sponge Bob cases are grouped on the shelf below. That makes perfect sense, right? Wrong.

It might sound counter-intuitive, but if Red Stag handled fulfillment for this business, we might put the Hello Kitty iPhone 6S case on a shelf next to a blender and a tie-dye kit. The Sponge Bob iPhone 7 case might be located between a Sharpie marker set and a pair of bunny slippers. Each of our shelves holds unrelated products for different clients. The inventory for your iPhone accessory business is stored on many different shelves throughout our warehouse.

This may sound crazy at first, but it actually saves time and lowers our error rate. We map out the location of each product and include that on the slips we give our pickers. When one of our team members sets out to fill an order for a Sponge Bob iPhone 5 case, he can go right to the mapped location and pick out the correct item. He doesn’t have to carefully read labels to make sure he’s got the iPhone 5 and not the iPhone 4. It’s the only iPhone case on that shelf, so he immediately knows he has the right product.

When “kind” is grouped with “kind” in eCommerce fulfillment, it’s harder to find the correct product. It’s also much easier to make a mistake and put an item in the box that looks very similar to what was ordered. Every mis-pack costs you time and money and that can slow the growth of your business.

Applied Inventory Organization for Small Businesses

You don’t have a huge warehouse. You might not have a wide array of dissimilar products you can mix up together. But you can still apply this inventory organization hack to save time and money.

Going back to the iPhone accessory example, you can start by grouping by size. It’s much easier to tell Hello Kitty from Sponge Bob than it is to tell an iPhone 6 case from an iPhone 6S case.

You don’t have to stop there. Perhaps you also sell charging cables, cell phone car mounts, and batteries. One shelf in your improvised warehouse might store Hello Kitty iPhone 7 Plus cases, iPhone 7 Plus batteries, 12-inch charging cables in three colors, and a car mount for the iPhone 7 Plus. You can similarly mix it up on every shelf.

An Inventory Organization System to Make the Hack Work

This hack comes with one warning: it will work only if you have a solid inventory management system. Throwing items on random shelves without cataloging and labelling them could lead to fulfillment chaos.

If you don’t use an inventory management app, you may be using your physical inventory organization as a proxy for actually managing your stock. You can limp along like this for a while when your business is very small, but pretty soon you’ll start to trip over your bootstraps. Once you have an inventory management system in place, you’ll be able to reorder stock before you run low, chart your seasonal sales patterns, and grow your business – and save time on picking and packing your orders.

When you are starting out in eCommerce, you are your own fulfillment center. You pick and pack every order, on top of handling marketing, managing inventory, and probably mopping the floors, too. The time you can save by implementing this hack is valuable time you can use to grow your business.

However, as your business grows, making the move to a quality fulfillment partner is going to be a necessary decision. Just like organizing your inventory in an unorthodox way can be advantageous, the same can be said when looking for a fulfillment partner. You don’t want just any warehouse picking and packing your orders.

Rather, find a fulfillment provider that focuses on your company’s niche, in terms of product size and type! For example, ShipBob, is a fulfillment provider focused on lighter weight products, as well as young companies starting out with smaller order volumes. Even further niche focused fulfillment providers such as Printful offer customer designed apparel fulfillment.

About the Author(s)

Jake Rheude is the Director of Business Development and Marketing for Red Stag Fulfillment, an ecommerce order fulfillment provider with warehouses across the United States.